Ports prepare for Suez surge

Following the refloating of the 20,000 teu Evergreen containership ‘Ever Given’ that has been blocking the Suez Canal for the best part of a week, attention is now turning to the surge of imports that are due to arrive at Europe’s shores as a backlog of vessels begin to transit the canal.

Among those ships that have been waiting to transit the canal are 100 containerships with an aggregated capacity of 1m teu, according to figures from Lloyd’s List Intelligence. While some of that cargo is outbound or empties, on average 52% of canal capacity each week is northbound to Europe. 

“From our perspective, it is going to be more chaos and more congestion,” said Drewry senior ports analyst Eleanor Hadland. “If the canal had been running at capacity, you would just assume that everything was going to be a week late.

“More realistically there is going to be some element of catching up as they clear the backlog, which will lead to vessel bunching. That is a complete nightmare for all terminal operators.”

Meanwhile, empty containers and exports will have been backing up at the terminal so there will not have been any respite from emptying out of the yards.

“The build-up of empty containers will be an ongoing problem, and we’re going to see more of this vicious cycle of yard congestion,” Ms Hadland said.

But the situation Europe is unlikely to lead to that of the US west coast, where ships have been forced to anchor off for up to two weeks while awaiting berths.

“The big advantage that Europe has is that it has more spare capacity,” Ms Hadland said. “There are multiple port calls in a small range, compared the US west coast, where probably 70% of the cargo on a vessel is destined for Los Angeles/Long Beach and there is little spare capacity at other ports so the only option they had was to queue.”

In Europe, however, carriers had the option of diverting to smaller, less busy terminals. 

When Felixstowe became congested last year, for example, spare capacity was available at Dunkirk and Zeebrugge. But it is not ideal and does add to costs.

“If you are destined to Antwerp and you have a terminal available in Zeebrugge, it is not a complete disaster if the Antwerp cargo ends up in Zeebrugge.”

The same was true Hamburg-destined cargoes being offloaded at Wilhelmshaven or Bremerhaven.

“Carriers have a lot more options up their sleeves, which is part of the reason we’ve not seen the congestion seen in the US.”

Moreover, carriers have seen the problems caused by cutting and running, which has a knock-on effect. 

“We are still seeing constraints on empties in Southeast Asia and in China so carriers will want to get empties back because they can only fulfil the demand if they have empties.”

Nevertheless, the influx of cargo increases the likelihood of the congestion crisis rumbling on for longer, Ms Hadland said. 

“There isn’t much spare capacity in the system, partially due to demand and partially due to everything moving more slowly. The structure, capacity and slightly more limited demand picture in Europe means we won’t get the US situation, but we’re not starting from a great position.”

One terminal operator said it was too early to tell what the full impact would be, but said that carrier schedules had been “all over the place” for some time, and for ports it would just mean more of the same.

The International Federation of Freight Forwarders Associations warned the disruption of the supply chain was expected to “worsen dramatically” over the coming weeks. 

“Terminals will experience high congestion and the severe drop in vessel arrival and container discharge in major terminals will aggravate the already ongoing shortages of empty containers available for exports” it said in a statement last week. “High delays in shipments, increased costs, and product shortages are therefore expected.”